Jean Galea

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đŸ’„ Lending Platform Lendy Goes Bust – Lessons Learnt

Last updated: March 15, 20223 Comments

In May 2019, UK lending platform Lendy (previously known as SavingStream) went into administration following an announcement by the FCA.

This didn’t come as much of a surprise to many investors on this platform since things had been going downhill for some time. However, it’s always a sad moment when a platform you’ve invested money in goes out of business, possibly taking with it your money.

It’s also a moment to learn some lessons that will serve us well for future investments.

How did Lendy Work?

Lendy was a platform where property developers could apply for and obtain bridging and development loans. Most of these loans returned 1% per month and Lendy sometimes paid bonuses on loans that were overdue or simply defaulted. The loans were for the ranges of 3-12 months however many of them ended up defaulting or running for much longer than agreed.

These loans were secured against property or land with LTV ratios of 11-70%. There was also a discretionary provision fund that allegedly held 2% of the entire loan book in reserve.

All loans were secured against property or land. Lendy used to loan against boats and other items but they veered away from these types of loans in favor of property developments. The loan-to-value ratios on the properties and land ranged from 11-70%.

According to estimates, around 20,000 investors were operating on Lendy, with a total of ÂŁ165m invested in the firm at the time of its closure. The platform had offered returns of upwards of 12% before things went south. It had been operating since 2013.

The money investors had invested in loans on the platform is now in jeopardy. Many investors also had uninvested money on the platform, and there are also doubts whether that part of their funds can be obtained eventually or not.

Concerned investors have launched the Lendy Action Group (LAG) that has the following aims as stated on its website:

  1. To act as a point of support and provide coordination, news and information to Lendy investors affected by their collapse.
  2. To work collectively to recover our investment. We are many but dispersed – together we become strong.
  3. To be a voice for investors to the administrators, regulators and press.
  4. To explore potential opportunities for further actions (if they become necessary and legal basis can be defined for such).

ORCA Money’s chief executive Iain Niblock has slammed failed peer-to-peer platform Lendy as a “typical example of poor P2P lending”, as he urged investors to seek out less risky loans.

Niblock who also co-founded the P2P investment aggregator and analysis firm said that it was “no surprise that Lendy had gone into administration, citing the platform’s “extremely poor” loan book performance and regulatory issues, which had been a cause for concern among investors for some time.

“Disappointingly, the lender was at one time one of the more popular UK P2P platforms with cumulative lending volumes reaching £428m,” Niblock added. “Over 22,661 lenders were attracted to its simple one percent interest per month offering.

“The platform grew rapidly in 2016 with cumulative lending growing from £79m by the end of 2015 to £271m by year end 2016. The company has suffered from extremely poor loan performance with worryingly high numbers of loans in defaults. Currently, on the platform there is £97m worth of loans in default and, only £65m of loans repaying.”

Now that an investigation is underway, it has become apparent that there was foul play by the owners of Lendy, Liam Brooke and Tim Gordon (see video of them further down):

Detailed investigations have been undertaken into the Company’s affairs during the period covered by this report, with the assistance of the Joint Administrators’ instructed solicitors Pinsent Masons LLP. The investigations have included carrying out reviews of the Company’s books and records, performing detailed analysis of the Company’s bank statements and reviewing the results of key word searches of the c480,000 Company emails held by the Joint Administrators. The Joint Administrators have now also carried out interviews with both Liam Brooke and Tim Gordon, the former directors of Lendy. The investigations have been concerned with a number of transactions, most significantly payments of approximately £6.8million that were paid to entities registered in the Marshall Islands for apparent marketing services carried out for Lendy. It is the Administrators’ position, however, that these payments were ultimately for the benefit of Liam Brooke and Tim Gordon. As a result of these investigations, on 1st June 2020 the Joint Administrators made an application to Court for a worldwide freezing injunction to be granted over the assets of Liam Brooke and Tim Gordon, as well as proprietary injunctions on the properties owned by companies linked to the directors, RFP Holdings Limited and LP Alhambra Limited. The Order was granted on the 4 June 2020. Proceedings have now been commenced against Liam Brooke, Tim Gordon, RFP Holdings Limited and LP Alhambra Limited. Owing to the nature of these claims, the Joint Administrators are unable to provide further information at this time. The Joint Administrators are continuing to investigate the affairs of the Company, however again, we are unable to provide further information at this time so as not to prejudice these investigations.

It is quite evident that they were scamming investors, as can also be indicated by this other article.

So let’s talk about those lessons I mentioned earlier. One of the biggest reasons behind my investing in P2P platforms and real estate crowdfunding is to learn how to invest as well as analyze my feelings when an investment is a success or when it tanks. The knowledge I get and the awareness of my feelings will guide my investing decisions further on in life, when being careful with my money will be of even more paramount importance due to aging, lower earning potential, and the necessity to support my children.

[Read more…]

Filed under: Money, P2P Lending

Gambling v Investing: The Similarities and Differences

Published: June 05, 2019Leave a Comment

Investing in the stock market carries inherent risks. Just like gambling, it involves the risking of capital in the hope of future financial gains. Both involve speculating on an outcome that can’t be guaranteed – however, there are also some key differences to bear in mind. Let’s take a look at the similarities and differences between gambling and investing.

The Similarities

  1. Falling back on a safe option

Both gambling and investing offer the chance to fall back on a safe option. For gamblers, this might be playing on slot games that have a high payback rate – though offer less than you might stand to win at a high-risk slot. In blackjack, there are certain approaches to the game – and ways of budgeting – which can make a big difference to the house edge you’re up against, and how much you walk away with.

For example, the Martingale means you double your previous stake for every losing bet you make – so if you eventually win a hand you’ll have adequately compensated for your losses. We’d recommend putting these to the test when playing American blackjack before taking the table for real. Who knows, you might even prefer the experience, as so many gamblers do.

In investing, you can also choose to take a punt on tried-and-tested shares that have been rising in value incrementally over months – as opposed to throwing all your eggs into the same basket and investing in a start-up.

[Read more…]

Filed under: Money

Should You Buy North or South Facing Property in Spain?

Last updated: March 22, 20201 Comment

A common question in the property scene is whether one should buy a south or north facing property.

South facing provides the best conditions for sunlight, considering factors like the difference between morning and afternoon sun. Suitable lighting and direct sunlight impact directly in a very significant way many things from mood to electricity costs. A south-facing apartment tends to be warmer in winter, and breezy and not as hot in summer.

You should also think about how you are going to use the house? Are you a night owl or an early riser?…..sunset or sunrise? How will you use it at different times of the year? Now that so many kids go to daycare and most parents work, many prefer a West-facing house or apartment because you get the sun and light in the evening when you are home from work.

However, when buying a property as an investment, it might be worth thinking twice about automatically going for a south-facing property. A study in Japan found that North-facing property is actually a better deal if you plan to resell that property.

On average, north-facing units tend to increase in value after purchasing from the developer, while South-facing units tend to depreciate.

This is an interesting point to consider when you are looking to purchase a new apartment from a developer.

Data on over 196,000 apartment sales from 2006 to 2010 was collected by Attractors Lab. The price of north-facing units on the second-hand market increased by an average of 11.4% from their original price when new.

The price of south-facing units, however, decreased by an average of 5.4% from new.

Some of the reasons for the change in prices are:

  • Developers price south-facing units higher, and north-facing units lower.
  • In the second-hand market, units of various types and directions appear randomly for sale.
  • Purchasers will prefer a north-facing unit with a wider frontage and good views over a south-facing unit with narrow frontage and less impressive views.
  • Many people prefer an open view that is not blocked by other buildings and are less concerned about all-day sunlight if they are both working full-time and return home late in the evening.

I’ve lived in both south and north facing apartments in Barcelona, and found advantages and disadvantages in both; I personally don’t have a firm favorite if I have to choose between the two.

Do you prefer south or north facing properties? Why?

Filed under: Money, Real estate

How to Determine Your Chronotype and Plan Accordingly

Last updated: September 15, 2022Leave a Comment

I learned about chronotypes from sports sleep coach Nick Littlehales. While I’ve never had much trouble sleeping, I have struggled on and off with going to sleep and waking up at the right times.

Your chronotype describes your sleeping characteristic – whether you’re a morning person or an evening person. Chronotypes are genetic traits and are usually easy to spot.

Do you like staying up and going to bed late? Do you need and alarm to get you up for work in the morning? Do you often skip breakfast? Do you sleep in on your days off? Then it’s likely that you’re a PMer.

AMers wake naturally, enjoy their breakfast and love the mornings. They tend not to need an alarm to wake them, they’re less likely to feel fatigued during the day and they go to bed reasonably early.

There is a third category of chronotype – the inbetweener. Many of us genuinely are in-between, but almost all of the population live their lives as inbetweeners, regardless of their real chronotype.

To find out your chronotype and optimize your schedule around it, you can take the Chronotype quiz.

My Chronotype Quiz Results

My result was Lion and it certainly corresponds to my observed energy levels. Over the years I’ve figured out that my best wake-up time is between 6 and 7 am. In practice, most days it’s closer to 8 am, since life in Spain is geared towards late evening and nighttime activities, meaning I go to sleep later.

I’ve also given myself the liberty to sleep as much as my body requires, and it invariably falls between 7.5-8 hours. Afternoon power naps or siestas help me a ton to give me a fresh boost of energy for the evening time, and they do not affect my nighttime sleep at all. I’m not that sensitive to caffeine intake either, so I make use of coffee during the day quite liberally.

I try to sleep between 11 and midnight, anything later and I’m into my red zone and it will affect the following day negatively.

23andme Wake-Up Time Trait

Another supporting piece of evidence for me was the Wake-Up Time trait from my 23andme report, which again shows that I’m very strongly a morning person.

To compensate for less than 8 hours of sleep on certain days I’ll take a (coffee-fueled) power nap in the afternoon.

Why is it important to know your chronotype?

If we were left to our own devices, to get up and go to sleep whenever we wanted, to wake naturally and start work at a time of our own choosing, it wouldn’t matter hugely. But, strangely enough, working cultures have yet to develop with this in mind. Whether you’re an AMer or PMer, you still have to get to work for 9 a.m., you still have to be at training in the morning if you’re a football player, and in this instance, it’s the PMers that suffer because they are effectively trying to operate in a different time zone to their internal body clock. This is known as ‘social jet lag’.

Because they naturally get up earlier, AMers tend to get tired sooner and go to bed earlier too. This means that, when morning comes around, they will have enjoyed plenty of restorative deep sleep and so will be in a lighter sleep state as they approach their wake time. They often won’t even need an alarm.

PMers, on the other hand, will push on later at night, meaning that when morning comes, the alarm often needs to rouse them from an earlier part of sleep (only for the snooze button to be hit repeatedly), and they will spend the rest of the morning playing catch-up. A PMer is likely to lean on caffeine to do this.

Managing your chronotype

For a PMer, daylight on a morning is vital if you want to set your body clock to play catch up with the AMers. Get a dawn-wake simulator, which recreates a sunrise in your bedroom to wake you up, from a reputable brand such as Lumie or Phillips; open the curtains, go outside.

The bad news for PMers is that you should cut out the lie-ins at the weekend too. If you spend all week adjusting your body clock to the demands of your job, then let it all go at the weekend, your clock will drift back towards its natural, slower state, and you’ll be starting over come Monday.

Offices and workplaces should take this more seriously. Instead of having desk hierarchies where the more senior people get the window seats, allocate them to the PMers struggling through their morning and the AMers for their afternoon. Investing in daylight lamps will help both the AMers and PMers conquer their respective difficult parts of the day and increase their productivity, especially in winter, when there is less light.

It’s not all bad news for PMers. They have a natural advantage not only when it comes to enjoying nightlife, but also when working shifts. An AMer nurse working night shifts in a hospital would equally be in need of daylight lamps to play catch-up with their PMer colleagues. The most important thing for either chronotype to find is some harmony with their environment.

For example, an AMer might live with his partner, a PMer, and they both have to leave for work at 8.30 a.m. He gets up and 6.30 and she gets up at 8, but, of course, every time he gets up on a morning, he disturbs his partner. She goes back to sleep, and imagines it’s doing her good, but in reality she’s flitting between wakefulness and sleep.

But what about a compromise that could be made? They both get up at 7 instead, which is a big shift for her, but the AMer makes the breakfast and gives the PMer the space to sit in daylight, to reset her body clock and wake up naturally. It will take a bit of adjusting to, but all of a sudden the couple are working more in harmony. When the evening comes around, it is the PMer’s turn to do her bit, maybe cooking the dinner or doing the washing-up later, when the AMer is tired.

If you’re an AMer, you know you’re at your best in the morning, so you can plan your day to take advantage of this. Let’s say your job involves managing your company’s social-media accounts, some bookkeeping and a lot of communication, but also some of the more mundane realities of office life such as taking the mail to the post office and filing. Presuming you have a bit of freedom in the order in which you do things, you could manipulate your schedule so that you compose all your tweets and press releases in the morning, everything that requires you to be at your most alert, then spend your afternoon taking the post out and doing filing.

Often there isn’t this kind of freedom in our daily work, and sometimes a job to write a press release or something similarly requiring of thought will land on your desk in the afternoon and it has to be done right at that moment. But where we’re able to, instead of spending what feels like forever on getting something done in the afternoon, wondering why it’s taking so long,  just stop and have a think about it. If you’re struggling with it now, come back to it in the morning, when you’re fresher and more alert. It’s the same philosophy with PMers.

Chronotype: 7 Steps to Sleep Smarter

  1. Know your chronotype, and establish those of close friends and family.
  2. Manipulate your day so you can be at your nest when it matters most.
  3. Use caffeine as a strategic performance enhancer, not out of habit – and no more than 400mg per day.
  4. PMers – don’t lie in at weekends if you want to beat social jet lag.
  5. Fit meeting rooms, offices and desks with daylight lamps to improves alertness, productivity and mood at work.
  6. Know when to step up and when to take a back seat based on you chronotype.
  7. Learn to work in harmony with your partner if your chronotypes differ.

What’s your chronotype? Has it helped you achieve better performance?

Further Resources

  • When is your best time to drink coffee?

Filed under: Thoughts & Experiences

Navigating Through Life’s Scams, Quackery, Fake Science and Outright Bullshit

Last updated: April 03, 20242 Comments

One thing I’ve realized during the past 5 years or so is the mind-boggling amount of crap information that’s passed around as absolute truth. Of course, the arrival of the internet only hugely magnified this problem, so we live in an age where it can be extremely difficult to know what’s true and what’s not.

It seems like everyone around is trying to manipulate our thinking, taking advantage of human biases and weaknesses in logic to convince us to believe what they are trying to sell. Politicians do it, companies do it, religious organizations do it, etc etc.

In this post, I’ll list a number of great resources that have helped me in this journey to really understand how things work and cut through the crap. I’ll keep updating this list over the years.

Health & Medicine

  • Science-Based Medicine – Discusses popular health-related topics like vaccines, homeopathy etc.
  • PainScience.com – All about pain and associated treatments. Learn what works and what doesn’t.
  • Examine.com – Research about supplements and nutrition
  • FoundMyFitness – More exotic topics well examined
  • Athlean-X – Favorite site for building muscle

Science & Philosophy

  • LessWrong – Deep resource into philosophical arguments, rationality and logic.
  • Skeptic.com – Many topics covered and also a great podcast (Science Salon)
  • Skeptoid.com
  • Skeptical Science
  • Skeptical Enquirer
  • Neurologica
  • Center for Enquiry
  • Snopes.com
  • Rationalwiki
  • Sloww
  • Raptitude.com

I also recommend the Science Salon podcast hosted by Michael Schermer.

Economics & Politics

  • Behavioral Scientist – Discusses many current topics from a behavioral science perspective.
  • The Library of Economics & Liberty
  • American Institute for Economic Research
  • Mises Institute
  • Libertarianism.org

[Read more…]

Filed under: Thoughts & Experiences

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Jean Galea

Investor | Dad | Global Citizen | Athlete

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